A unique renovation of 93-year-old Washington School on Main Street will ease a critical shortage of affordable housing in Hays.
And because the school won’t be torn down, restoring the historic two-story red brick building will help bolster the city’s efforts to revitalize downtown.
That’s the hope of Matt Gillam, vice president of development for Overland Property Group, Leawood, which has optioned the beloved former elementary school to develop it into apartments.
“There is no option on the table to tear it down, and I know a lot of people in town have asked about it and I want to make sure that’s very clear,” Gillam said.
Gillam promised the Hays City Commission on Thursday evening that if the state in June picks Overland for federal tax credits, it will invest $4 million in a historical renovation. The plan is to turn classrooms and offices into 15 one-bedroom units and three two-bedroom units, while refurbishing the exterior to make it look the way it did 50 years ago.
“The application is already in to the state, and it is for historic rehab of that school,” Gillam told the commissioners at their regular Thursday meeting. “I have already had significant discussions with the historical society of the state of Kansas. I know this school can be designated, I know it can be used for this purpose.”
The Historic Tax Credit for Affordable Housing is a federal program that supports investment in historic buildings. It’s administered by the state’s Kansas Housing Resources Corporation. Overland has used the funding mechanism to develop historic properties elsewhere.
Overland in January won a one-year contract option for the school from USD 489. The $500,000 option is for the entire city block, including a large playground area to the west of the school.
Overland will do a historic renovation on the school, Gillam promised, “so the front of that building is renovated, and money is spent so it’s not an eyesore for the community, it’s a contributing piece of real estate in a very vital piece of downtown.”
Originated in 1986, the Historic Tax Credit program is growing in demand.
“This program is becoming more and more competitive every year because the demand and need is becoming more and more and more as things become less affordable,” Gillam said.
Overland’s previous attempts to win tax credits for Hays projects haven’t all succeeded. Hays commercial real estate broker Galen Romme has been scouting Hays for Overland, and brought the Washington School to their attention.
In talks in Topeka, state officials have been encouraging about the Washington School, Gillam said.
“In this case we feel very confident we’re putting our absolute best foot forward in town,” he said, noting “When this opportunity came in front of us, we really wanted to jump on top of it.”
Overland a few years ago finished up its three-phase Stonepost Apartments, also developed with tax credits, which are across the street from Washington. Stonepost has 63 units, all neighboring the Hays Aquatic Park, which is busy with swimmers in the summertime.
“I can just see a lot of synergy going on there with the Aquatic Center, “ said Commissioner James Meier.
The commission approved a letter of support for the project, with Vice Mayor Shaun Musil saying, “It would be really sad to see that building sit there empty many years, because you know what will happen.”
The state will announce the winners of the tax credits by June 1, Gillam said. If Overland wins, it will close on the Washington School and start construction by late 2019 or early 2020. With eight months for renovations, the Stonepost Lofts at Washington, as it would be called, could open by late summer 2020, he said.
Commissioner Sandy Jacobs asked about the range on rent. Gillam said it will start at about $380 a month and go up to $600, with minimal utility costs since the units will be energy efficient and Energy Star certified.
“This is just really a wonderful project,” Jacobs said. “I’m really excited about the future, particularly as it relates to downtown … I think it’s going to do much for our downtown. We’ve spent the last numbers of years thinking how do we get people living in downtown. That’s where success comes from. This is just huge and I’m thrilled.”
“It’s a movement that you guys can say started here before it started taking the country by storm,” Gillam said, noting Hays is ahead of his hometown of Salina, which is spending more than $100 million to revive its downtown. “You guys are already steps ahead of them, so kudos to you.”
Overland’s construction partner is McPherson Contractors Inc., Topeka, with a solid track record for hiring local subcontractors, he said.
On a Steamboat Springs, Colo., project using the same funding mechanism, Gillam said McPherson is using 70 percent local subcontractors.
“That was a big deal up there, and it’s something that we carry into all the local communities that we go into,” he said.
At the Washington site, additional buildings could go up where the playground is now.
Right now, 80 people are on the waiting list for the existing Stonepost apartments, and none of those are one-bedroom units, Gillam said. Stonepost Lofts at Washington is an opportunity to fill a critical need in Hays.
“There are not many one-bedroom units in this city,” Gillam said, explaining that the economics are better for developers on two- and three-bedroom apartments.
That’s particularly handy for the elderly, he indicated. Overland is focusing more and more on senior living, which is an emerging market. The aging population in rural Kansas needs alternative housing as they move out of their own homes, but want to remain in their community.
Gillam was part of a group that went to Topeka Feb. 21 and testified on the need for affordable housing to the Kansas House Rural Revitalization Committee, especially the elderly.
“Study after study shows that congregate living for seniors helps them mentally and physically,” Gillam said. “If it’s a dreary day they can walk around indoors and say hi to people instead of being cooped up indoors.”
It’s likely the Stonepost Lofts at Washington will have a very high percentage of senior residents, he said.
Exterior improvements will include a new roof, new mechanical, new windows and rehabilitation of the red brick. Unlike Stonepost, there won’t be any entrances from the street to the Washington apartments. Instead, residents will enter from what are now the school door entrances to hallways, with doors from there into the apartments.
The gymnasium will be maintained as an indoor community space. That’s a popular feature now, Gillam said, particularly with senior residents, who like to socialize without having to go outside in harsh weather.
Commissioner Ron Mellick asked Gillam to confirm that the apartments won’t be for Fort Hays State University students. It would be against the program rules for FHSU students, Gillam said, other than only nontraditional students, going to school part time.